Afraid of outsourcing? What if robots take our jobs?

Self-employed software engineer Martin Ford wonders whether technology is advancing to the point where automation will replace so many jobs that society will face long-term, structural unemployment. The 46-year-old Sunnyvale man has argued his case in a self-published book, “The Lights in the Tunnel.” He has summarized his thinking on the blog, Angry Bear. Portions of one such essay appear below as Ford says:

I’m not talking about far fetched science fiction-level technology here: this is really a simple extrapolation of the expert systems and specialized algorithms that can currently land jet airplanes, trade autonomously on Wall Street, or beat nearly any human being at a game of chess. As technology progresses, I think there is little doubt that these systems will begin to match or exceed the capability of human workers in many routine job categories, and this includes a lot of workers with college degrees or other significant training.

Martin acknowledges that since the mechanization of agriculture in the late 1880s the farming workforce has been reduced from 75 percent of U.S. workers to about three percent today. Yet a growing population found other jobs, leading economists to dismiss fears of technological job destruction as a “Luddite fallacy.” But Ford thinks the future may not echo the past, as he writes:

The reasoning behind the Luddite fallacy goes roughly like this: As labor-saving technologies improve, some workers lose their jobs in the short run, but production also becomes more efficient. That leads to lower prices for the goods and services produced, and that, in turn, leaves consumers with more money to spend on other things. When they do so, demand increases across nearly all industries — and that means more jobs. That seems to be exactly what happened with agriculture: food prices fell as efficiency increased, and then consumers went out and spent their extra money elsewhere, driving increased employment in the manufacturing and service sectors.

The question we have to ask is whether or not that same scenario is likely to play out again. The problem is that this time we are not talking about a single industry being automated: these technologies are going to penetrate across the board. When agriculture mechanized, there were clearly other labor intensive sectors capable of absorbing the workers. There’s little evidence to suggest that’s going to be the case this time around.

It seems to me that, as automation penetrates nearly everywhere, there must come a “tipping point,” beyond which the overall economy is simply not labor intensive enough to continue absorbing workers who lose their jobs due to automation (or globalization). Beyond this point, businesses will be able to ramp up production primarily by employing machines and software–and structural unemployment then becomes inevitable.